OPM Proposes Extending Fed Health Benefits to Same Sex Partners

By Eric Katz

April 11, 2013

The Obama administration has proposed to expand the Federal Employees Health Benefits Program to domestic partners -- including both opposite- and same-sex couples -- as part of sweeping changes to the program.

The Office of Personnel Management announced its proposals at a congressional hearing Thursday, saying the initiatives would improve efficiency and help recruit a better workforce while saving $8.4 billion over ten years.

Previously, same-sex domestic partners were not covered under the FEHB Program. Jonathan Foley, OPM’s director of planning and policy analysis, testified at the House Oversight and Government Reform Committee’s Federal Workforce, U.S. Postal Service and the Census Subcommittee that the expanded coverage would cost $600 million over 10 years.

“I hear you,” Issa said, “but I find that as believable as estimates of how much Obamacare would cost.”

In his prepared testimony, Foley said expanding coverage is a wise business move for the federal government.

“This proposal would align the FEHB Program with best practices in the private sector as larger employers competing for talent are increasingly offering domestic partner benefits,” Foley told the subcommittee.

Providing benefits to domestic partners would be coupled with a new “self plus one” option for federal employees, meaning they could provide coverage to themselves and a partner or one child. Currently, feds must choose either self or family enrollment. Overall, this would save $5.2 billion over 10 years, Foley said.

Another major change to the benefits system would be to allow regional options as part of the health benefits plan. This would allow OPM to consider additional plan types but only offer contracts when it was in the best interest of enrollees, according to Foley, who said the proposal would save $260 million in the next 10 years.

Some lawmakers, including Del. Eleanor Holmes-Norton, D-D.C., expressed concern this would lead to breaking up the large pool of enrollees covered in FEHBP -- currently 8.2 million employees and retirees. Foley said OPM was not proposing a regional pool, and that regional plans would still be part of the larger pool.

OPM also suggested allowing the agency to negotiate with pharmacy benefit managers directly, instead of relying on individual health plans to do so. Foley said by leveraging the size of its enrollment pool, it could save $1.6 billion over 10 years.

Finally, OPM proposed creating differentiated rates for enrollees based on their health status and participation in health and wellness programs. Tobacco users, for example, would be subject to higher premiums.